tpia*:

and that has meant less conflict in nigeria, right.

no bombings.

Sacarsm. It means the guy is playing 'ball'.

fstranger1:

what do you mean?

I bet you trust Soludo? innit?

Soludo ke. Only Sanusi, to an extent. But, I am not too sure about his 'Northern' Agenda.

@ola.olabiy:

Nah, looks like he was balling:
http://www.businessweek.com/news/2010-04-06/goldman-sachs-aganga-named-nigerian-finance-minister-update2-.html

Aganga is a qualified accountant and worked for Ernst & Young LLP before joining Goldman Sachs in London in 2001, where he started at the European prime brokerage division, which provides financing, trading and other services to hedge funds. He was promoted to managing director, the second-highest rank in the company, in 2003.

Definitely not making chicken scratch money. Wouldn't be surprised if he was doing $1 million/year.

eku_bear:

@ola.olabiy:

Nah, looks like he was balling:
http://www.businessweek.com/news/2010-04-06/goldman-sachs-aganga-named-nigerian-finance-minister-update2-.html


Definitely not making chicken scratch money. Wouldn't be surprised if he was doing $1 million/year.

Nah.

Or maybe with bonuses. There are more than 100 managing directors at GS. It is not a biggie like that.

^^It doesn't mean he was no1 or no2 in command.

ola olabiy:

Nah.

Or maybe with bonuses. There are more than 100 managing directors at GS. It is not a biggie like that.

Goldman Sachs MD's earn between $150k and $300k depending on location and unit. I would not be surprised if they make close to $1m per annum including bonuses and options.

ola olabiy:

Nah.

Or maybe with bonuses. There are more than 100 managing directors at GS. It is not a biggie like that.

Hrm: http://dealbook.nytimes.com/2007/02/13/for-goldmans-highest-echelon-a-salary-to-match/
http://www.jobnob.com/goldman-sachs-co-salary
http://news.efinancialcareers.com/NEWS_ITEM/newsItemId-8444

So $300k + bonuses? From that third link, 300k or 400k might be a good estimate of the bonuses. So more like $600k/year if he was only a managing director and not partner managing director.

Not $1 mil/year. Certainly enough though to become comfortably a millionaire in a short period of time, assuming you save/invest some of it.

Katsumoto:

Goldman Sachs MD's earn between $150k and $300k depending on location and unit. I would not be surprised if they make close to $1m per annum including bonuses and options.

You are right. Close to a milla with bonuses.

But, that's still before tax, remember that. A minister of state is still better off.

Let alone a substantive one in a 'juicy' ministry like his .

ola olabiy:

You are right. Close to a milla with bonuses.

But, that's still before tax, remember that. A minister of state is still better off.

Let alone a substantive one in a 'juicy' ministry like his .

I think he can make up the money in Nigeria later on down the line. But in the short term, he is taking a big loss. Unless he is massively corrupt. . . which I doubt. Dude has too much reputation to lose if he gets caught.

eku_bear:

I think he can make up the money in Nigeria later on down the line. But in the short term, he is taking a big loss. Unless he is massively corrupt. . . which I doubt. Dude has too much reputation to lose if he gets caught.

As if they ever get caught.

rEPUTATION KO, REPUTE NI.

He must have made more by now. Orisirisi allowee.

How much money could he steal that would be worth his while?

You don't even need to be caught to ruin your reputation, just some hearsay.

If I worked in the finance world, I'd not want to ever risk my integrity like that. If you don't steal, then when your tenure ends you can go back to private industry and jump up a couple paygrades.

Unless Aganga has the opportunity to steal say. . . $20 mil, and do it with say 5 or 10% risk of ruining his reputation, it probably isn't worth it.

And what opportunity will the guy have to even steal $20 million for himself  Minister of Finance is not Minister of public works, where you can give your cousin contracts. Or NNPC president 


Anyway, I'm sort of curious about the career path to enter this industry. Management consulting is also somewhat attractive, but the pay scales are far inferior

eku_bear:

How much money could he steal that would be worth his while?

You don't even need to be caught to ruin your reputation, just some hearsay.

If I worked in the finance world, I'd not want to ever risk my integrity like that. If you don't steal, then when your tenure ends you can go back to private industry and jump up a couple paygrades.

Unless Aganga has the opportunity to steal say. . . $20 mil, and do it with say 5 or 10% risk of ruining his reputation, it probably isn't worth it.

And what opportunity will the guy have to even steal $20 million for himself Minister of Finance is not Minister of public works, where you can give your cousin contracts. Or NNPC president
Anyway, I'm sort of curious about the career path to enter this industry. Management consulting is also somewhat attractive, but the pay scales are far inferior

You really don't know much about juicy ministries in Naija. In fact, regions fight it out and reject not-so-juicy ones. LOL.

He's rich but poor compared to Nigerian politiciaans. FACT!



And, forget that reputation thingy.

^-- Maybe. I personally much prefer the Aganga model to wealth-building than the Nigerian politician model. To each his own, I guess.

^^^^^

The only way to resolve this is through the FT article itself:
http://www.ft.com/cms/s/0/3f1333a6-2590-11e0-8258-00144feab49a.html#axzz1BktkZOPP

Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/3f1333a6-2590-11e0-8258-00144feab49a.html#ixzz1Bku7PhqC

Nigeria’s debut international bond issue saw strong demand from investors in spite of worries over its depleted oil savings.

The country, which has been at the centre of controversy over its fund to gather windfall oil revenues, sold $500m to investors.

Olusegun Aganga, Nigeria’s finance minister, said the issue was more than twice oversubscribed. “It is a debut bond, it shows we have met with international standards getting the deal to market. It means our corporates can access longer-term funds and it reinforces our position as an economic and political leader in Africa,” he said.

Mr Aganga said some of the world’s biggest investment funds from 18 different countries subscribed to the bond issue. However, some of the world’s biggest fund managers told the Financial Times earlier they would not buy the bonds because of Nigeria’s deteriorating public finances.

Concerns over a huge outflow of money from Nigeria’s “rainy day” oil fund, known as the excess crude account (ECA), forced the government to pay investors higher yields than would otherwise have been expected, investors said.

The 10-year bond priced with yields of 7 per cent, higher than other similar bonds from other sub-Saharan nations. Gabon and Ghana 10-year bonds trade at 5.8 per cent and 6.2 per cent respectively.

One investor said: “Ordinarily we would have bought this bond as Africa is a coming market in our view, with potential for strong returns. But we were not impressed by the Nigerians.”

Mr Aganga said the pricing was a good result and that if Ghana launched a bond in today’s market it could expect to pay more than 7 per cent.

Nigerian officials and bankers managing the 10-year bond deal insisted that there was considerable appetite for the bonds. Bankers said order books or demand rose to about $1bn.

But worries about how President Goodluck Jonathan’s government has run the excess crude account – into which surpluses from crude exports above the budgeted price of oil are supposed to accumulate – marred what has been an eagerly awaited bond issue.

Many investors had expected Nigeria, Africa’s most populous country, to issue bonds as long ago as 2008. The financial crisis and drop in oil prices delayed the deal, the fourth international sovereign bond from a sub-Saharan nation, excluding South Africa.

In spite of the problems, Nigeria remains an attractive investment because of its large oil reserves, growing private sector and banking reforms. It is also only the fourth sub-Saharan country, excluding South Africa, to issue debt. This scarcity helps attract demand.

Investors also stressed that yields of 7 per cent were an attractive return for a country that was likely to remain on a stable financial footing, given that oil prices were rising.

They point out that Nigerian bonds are not a safe investment like German bonds, which is why the yield premium is much higher than in these developed economies.

Nigeria’s ECA has dwindled by more than $30bn in the past four years – about $7bn last year alone – according to officials and analysts. It now stands at less than $1bn, they say.

Foreign reserves, of which the ECA is a part, inched up month by month to $33.5bn by mid-January but are still down more than a quarter on year-ago levels.

Nigeria has shrugged off the concerns, saying the spending was needed to defend the currency against increased dollar demand, fund projects in the power sector, and provide seed funding for a planned sovereign wealth fund, which should have a firmer legal basis than the ECA for safeguarding oil savings.

The special account has stirred political tensions because under the federal constitution the revenues should be split between the federal, state and local governments.

I don't know the details about this offering but an oversubscribed bond offering does not necessarily mean it was a success. You have to look at the yield, that's what matters. The yield is the interest rate Nigeria has to pay to the investors. The lesser the yield, the more successful the offering.

Investors with huge risk appetite always lap up bonds with high yield. Pretty much every Greek and Irish bond issue was oversubscribed. Here is an excerpt from an article about Greek bond issues weeks before they required a bailout:

Athens. Debt-ridden Greece raised 1.56 billion euros ($2.1 billion) in a heavily oversubscribed auction for 26-week and 52-week bonds on Tuesday, its first attempt to borrow since details of a euro-zone and International Monetary Fund rescue package were revealed at the weekend.

But although market jitters were soothed as investors flocked to buy the issues, which are effectively backed by the European Union and the International Monetary Fund, the interest rate was punishingly high.

The Public Debt Management Agency said the yield for the 52-week bill stood at 4.85 percent compared with 2.2 percent for a 52-week issue sold in January. But the issue was 6.54 times oversubscribed, compared with 3.05 times in January. The yield for the 26-week bills was 4.55 percent compared with 1.38 in a similar auction in January. That issue was 7.67 times oversubscribed, compared with 4.87 in January.

http://www.thejakartaglobe.com/business/greek-bond-auction-oversubscribed/369236

As you can see, over-subscription is not necessarily a mark of a successful bond issue in a world awash with liquidity. It is merely a sign of investors chasing risk. Nigeria paying higher interest rates than Ghana for bonds of the same duration is not something to pat ourselves on the back for.

For the significance of a managing director in GS, I have to note that a Managing Director position does not have the same cachet as it would have in the Nigerian corporate world. GS has hundreds, possibly over a 1 thousand MDs. Last year alone saw 321 people made MDs.

Goldman Sachs Group Inc., the most profitable securities firm in Wall Street history, promoted a record number of employees to managing director, boosting their pay and status as investment banks recover from the financial crisis.

The 321 appointments, up from 272 last year and 259 in 2008, were detailed in an internal memo obtained by Bloomberg News. The announcement came a day after the New York-based company selected 110 people to become partners, a designation that means they share in a special pool of

http://www.bloomberg.com/news/2010-11-18/goldman-sachs-promotes-321-to-managing-director-up-from-last-year-s-272.html

So now that it has been over subscribed, what is the other propaganda? Unscrupulous fellows

Nsiman:

So now that it has been over subscribed, what is the other propaganda? Unscrupulous fellows

Did you read 4 play's post?

4 Play:

I don't know the details about this offering but an oversubscribed bond offering does not necessarily mean it was a success. You have to look at the yield, that's what matters. The yield is the interest rate Nigeria has to pay to the investors. The lesser the yield, the more successful the offering.

Investors with huge risk appetite always lap up bonds with high yield. Pretty much every Greek and Irish bond issue was oversubscribed. Here is an excerpt from an article about Greek bond issues weeks before they required a bailout:

http://www.thejakartaglobe.com/business/greek-bond-auction-oversubscribed/369236

As you can see, over-subscription is not necessarily a mark of a successful bond issue in a world awash with liquidity. It is merely a sign of investors chasing risk. Nigeria paying higher interest rates than Ghana for bonds of the same duration is not something to pat ourselves on the back for.

You dont know the details, yet you speak on it.

Wether over subscription is a mark of success or not, that is not the issue, but t is surely not a sign that investors shun the bond. That is the point.

Ma_J_Blige:

You dont know the details, yet you speak on it.

Wether over subscription is a mark of success or not, that is not the issue, but t is surely not a sign that investors shun the bond. That is the point.

Yes, I can comment on the naive notion that over-subscription is the mark of a successful bond issue when the key issue for the borrower is the interest rate he has to pay to the lenders. If Gabon and Ghana can issue 10 year bonds at 5.8% and 6.2% respectively, why do you rubes fall for the idea that borrowing at 7% p/a is to be celebrated?

If you offer sovereign bonds at punitive yields, there will inevitably be over-subscription but that is not a mark of success. Think of it this way, supposing a trader wanted to sell a car and cars of the same make and in similar condition are going for $4,000. However, due to the seller's less than wholesome reputation, he can only offer to sell at $3400. Inevitably, if potential buyers hear that a car which they have to pay $4000 is being offered at a steep discount, the dealer will have more buyers. However, from the dealer's perspective, the trade is not a success.

This is how bond issues are assessed. For people like you, if they hear that NNPC has been sold for $10m and that the Govt claimed the bid process to be a success because loads of investors were interested, you will swallow it hook, line and sinker. They're playing on your ignorance.

PS: What this means is that the investors will get 7% p/a of the loan amount, $35m per year for 10 years and the full amount, $500m, upon maturity. In total, $850m. A juicy return for fund managers when you will get less lending to Ghana.

Is the 1 or 2% difference that big a deal?

Plus the effective interest rate will fluctuate on the open market with the confidence that others have in the Nigerian economy, yes?

The most useful thing about the bond to me is that it will make it easier for Nigerian organizations to borrow from foreign ones (if I understand things correctly.)

Easier for foreign banks to price a loan if they have this Eurobond as a reference point, I think.

eku_bear:

Is the 1 or 2% difference that big a deal?

Plus the effective interest rate will fluctuate on the open market with the confidence that others have in the Nigerian economy, yes?

The most useful thing about the bond to me is that it will make it easier for Nigerian organizations to borrow from foreign ones (if I understand things correctly.)

Easier for foreign banks to price a loan if they have this Eurobond as a reference point, I think.

So 1 or 2 % is not a big deal when we are talking about hundreds of millions. This is 5 to 10 million of 500 million.

Eku, why are u saying this? Oya, go sleep.

Well, paying slightly higher than others for something is unfortunate, but probably not the end of the world. And who knows, maybe there is an early buyout clause the FG can take advantage of if the value of the bonds increase.

Anyway, overall the benefits outweigh the costs if the end result is cheaper credit for Nigerian banks, corporations, and individuals.

^^ You are quite right and I agree with you here, you seem to have grasped the essence of the bond issue - which is to open up Nigeria to the international bond market to assess cheaper funds. I doubt that the Nigerian govt really needs the $500m being raised here, but are looking to create an international appetite for Nigerian bonds and they had to come to the market with a decent amount and I guess $500m was just about right.

Currently the Nigerian govt issues bonds locally in Nigeria (naira) at up to 14%, the naira has not moved too much against the dollar in the last 5 years (apart from a deliberate action by the CBN a few years ago), so it makes sense to start raising funds in dollars at around 7% and set this as a benchmark for other corporate/private/governmental institutions in Nigeria who can now take advantage of this opening. The foreign exchange risk btw the naira and the dollar has been historically low, and can be quite easily managed and mitigated with the right financial instruments and clever planning, since the interest and the principal repayments in most cases would be generated in naira and subsequently converted to dollars.

The bottomline is - why borrow in naira at 14% when we can borrow in dollars at 7%??

^-- Yep. Cheap credit is part of what makes the Western world so great. If this bond helps us bring cheap credit to Nigeria, we all win.

Mr. 4

Some people just speak English as if that is all that matters. You can speak all the English in this world and yet make no sense. That is exactly what is happening here.

Who is talking of the percentage or whether it is better than Ghana or not. The topic of the propaganda was that investors shunned the bond, and the simple question, devoid of all the abracadabra english and foul economic terminologies is this, how can the Eurobond said to have been shunned come out at the end of the day to be over subscribed?

Save all your English for another day - Mr man and stick to the issue at hand.

I don't see this as a success because of the high yield, it did just ok,

Hodaya:

I don't see this as a success because of the high yield, it did just ok,

It will be a huge success. Those that invested have already know their gains. It is a business way of stealing money (Accepted means). If I had money, I would have participated.

How much is the whole money? something we can even pay off even if it fails.

Think, think think my brothers!

Nothing done in Nigeria by Nigerians is seen to be good by Nigerians, especially the ones who can die for their adopted foreign country.